A guarantee of payment made by an export credit agency (ECA). ECAs are government or semi-government agencies that provide
guarantees and
insurance for
exports, and occasionally for
imports as well. An export credit guarantee ensures that an exporter receives payment for goods shipped overseas in the event the customer
defaults, reducing the
risk to the exporter's business and allowing it to keep its
prices competitive. The use of export credit guarantees is controversial; critics allege that their existence negatively impacts international development, as developing countries cannot compete with such insured exports. Proponents argue that they enable developing countries to import products they otherwise would not be able to afford.